Condos v. Home Development Co.
At a Glance
| Parties | A developer and subdivision owners sought to stop a lot owner from selling liquor in violation of subdivision restrictions. |
|---|---|
| Panel | Chief Justice Phelps |
Summary
Condos is another leading Arizona case on abandonment and selective enforcement of deed restrictions. The challenged covenant barred liquor sales on lots in a subdivision except for one specifically permitted lot. The defendants argued that many other restrictions had been violated over time and that the overall scheme had therefore been abandoned, making the liquor restriction unenforceable. The Supreme Court rejected that argument. It explained that each material restriction can remain separately enforceable unless the violations are so broad and severe that they show abandonment of the entire general plan. Tolerating breaches of other, different restrictions does not automatically waive a distinct covenant that still has substantial value to residents. The court also said a government-issued liquor license did not override the private covenant. This opinion remains helpful when an HOA or homeowner needs to distinguish unrelated past violations from the specific covenant currently being enforced.
Holding
Violations of some subdivision restrictions do not automatically destroy a separate covenant, and a private restriction can still be enforced unless the evidence shows abandonment of the entire plan.
Reasoning
The court examined the actual violations and concluded they were not so extensive or so closely tied to the liquor covenant as to prove abandonment of the whole scheme. Minor or different departures from other restrictions did not impair the continued value of the no-liquor restriction to neighboring residents.
The court also reaffirmed the hierarchy between private covenants and regulatory approvals. A liquor license granted by the state did not override the private property rights created by the restrictive covenant, which remained enforceable in equity by the grantor and lot owners.
Why This Matters for HOAs
Condos is valuable whenever a homeowner defends a violation by pointing to unrelated noncompliance elsewhere in the community. Arizona courts look for abandonment of the relevant plan, not just a grab bag of different violations.
The case is also a reminder that public permits and licenses do not automatically cure a private deed-restriction problem. An HOA can still enforce its documents even when a governmental body approved the use.
